Five Things To Get Right When Growing A Business

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A business that is not growing, is dying. This may not be immediately obvious, but history has proven this to be true. Even established companies are not exempt from this rule. So it is normal to seek avenues to grow and expand your business. Before doing that, here is something you should know.

Growth is different from scaling!!!

This can be confusing at first, but entrepreneurs have different priorities when growing versus when scaling their business. Growth has to do with increasing the business’s resources. Although this also increases the revenue, however, profit margin may remain the same or reduce. Whereas scaling implies growing the company’s revenue without necessarily increasing its resources. Thus increasing its profit margin.

Here are five things every entrepreneur should get right when growing a business

Funds

When it comes to growing a business, cash is king. However, many entrepreneurs learn this lesson the hard way. 8 out of 10 businesses fail in the first 18 months. That’s 80%, a staggering number indeed. But among the many reasons why this happens, lack of cash sits at the top.

Many business owners find themselves in a fix a few months into the business due to poor cash flow management. The problem arises when a business spends more cash than it receives.

This creates a liquidity problem and if it continues the business will be unable to cover the regular payments that keep it going, such as loan repayments, or paying its suppliers. If you want to grow your business, then you need to avoid getting cash-strapped by properly managing cash flow.

Innovation

According to McKinsey “In a business context, innovation is the ability to conceive, develop, deliver, and scale new products, services, processes, and business models for customers”. But there’s a catch. For innovation to help a business grow, it must be useful.

Looking at the current trend among startups, innovation is often associated with a major technological breakthrough. But it doesn’t always have to be. A simple upgrade in performance, services, or products in a creative and useful way can serve the same purpose.

The point is to give the customers a new experience that adds more value to their lives. If this is done correctly, the business will benefit as customer loyalty grows and revenue increases.

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Management

When starting a company, it is quite easy for the founder or business owner to take on most of the tasks and decision-making needed to keep the business running. But if you are thinking about growing the business, then you must consider getting a team.

This could be daunting at first considering that most business owners have become accustomed to running the show themselves and so find it difficult to delegate. But it’s a learning process and one that’s inevitable if you must grow the business.

Without a team in place, it will be difficult to manage the business as it grows, and trying to do it alone will lead to poor decisions and ultimately poor business management.

Planning or strategy

Growing a business doesn’t just happen, and although some businesses are easier to grow and scale up without investing so much into planning, the majority will require in-depth planning.

Having a plan saves you from making spontaneous decisions that are not well thought out. It also makes it possible to account for unforeseen circumstances that could arise as the company grows, and prepare accurate countermeasures in advance.

Technology

The rise in technology has spurred innovation in all industries. Whenever a new technology comes along,  business owners look for creative ways to adopt the technology in growing their business.

They do this by understanding how the technology can be implemented in their business processes to cut production costs, speed up product development, improve customer experience, or boost efficiency and productivity.

Companies that are quick to adopt new technologies in their processes often have a head start over those that don’t. Typically, SMEs are at an advantage here since their small size makes them flexible enough to adopt new technologies with minimal downsides.

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That’s all for now folks.

Until next time, stay inspired and keep chasing your dreams!!!

Cheers,

Alex